How Much Free College Aid Are Students Missing Out On?

With interest rates on student loans set to increase dramatically for the 2022 to 2023 academic year, finding ways to minimize debt and save on college may be more important now than ever before. Unfortunately, too many students fail to access all the free college aid they're eligible for and the losses are staggering.

In fact, a January 2022 report from the National College Attainment Network (NCAN) showed that billions of dollars in Pell Grants were left unclaimed by the high school class of 2021. What makes this particularly surprising is the fact that filling out one form is all it takes to determine eligibility for Pell Grants, which are a type of student aid that typically does not need to be repaid.

Scholarships and other financial aid are also left on the table each academic year. If you're heading to college or wondering how you'll pay for higher education for a dependent, read on to learn which types of aid go unclaimed and what you can do to access them.

Up to $3.75 in Pell Grants Lost

According to a January 2022 report from the National College Attainment Network (NCAN), $3.75 billion in Pell Grants went unclaimed by students who graduated high school in 2021. This type of financial aid is awarded only to undergraduate students who "display exceptional financial need and have not earned a bachelor's, graduate, or professional degree," per Federal Student Aid.

Pell Grants are an especially important type of financial aid since this funding usually isn't required to be repaid, except in special circumstances.

The NCAN report also revealed that more than 1.7 million high school graduates failed to fill out the Free Application for Federal Student Aid (FAFSA) for the 2020 to 2021 academic year. Further, just under half of those graduates were likely eligible for Pell Grants and the average amount of aid left on the table worked out to $4,477 per student nationally.

$100 Million in Scholarship Money Unclaimed

The National Scholarship Providers Association (NSPA) estimates that an average of $100 million in scholarship funds are left unclaimed every academic year. This is mainly due to "a lack of applicants," they note, adding that scholarship providers consider a lot more than grades when choosing recipients for their awards.

College-bound students can get their share of funding by dedicating some of their time to finding college scholarships and taking steps to apply. Some of the best places to find college scholarships include school counselors, college financial aid offices, civic groups, and ethnic organizations you may belong to. An array of online scholarship search engines can also help match you with scholarships you could be eligible for.

The Bottom Line

Future and current college students are easily leaving billions of dollars on the table when they head off to school each year. However, the bulk of this issue can be solved by having all families fill out the FAFSA form each year, even if they don't think they qualify for financial assistance.

College students should also do their best to apply for college scholarships they may be eligible for, even if each application takes some time and some work. By putting some effort into paying less and borrowing less for higher education, the next generation of college graduates could be better off.